The Art and Science of Advertising

Key Scientific Challenges Blog Series, Entry # 4:

Late January, we announced the kick-off of our 2010 Key Scientific Challenges Program, what we hope is a thought-provoking series of guest blog posts here on Yodel Anecdotal that offer a quick overview of these scientific challenge areas. Check out our last post on microeconomics and social systems.

Today, we cover advertising, which is yet another important topic related to the Web. We’ve recruited Vanja Josifovski from Yahoo! Labs to give you a glimpse of how significant advertising is to the online world.

If you’ve seen Mad Men, you’ll know what it’s like to develop an infatuation with the 1960s advertising world – the fashion, the glamour, the old technology. While we’ve come a long way since then, advertising continues to remain a large part of our daily lives and a permanent fixture of our online experience. Here at Yahoo!, we have a special appreciation for the undercurrents of online advertising because it supports a large swath of the Internet ecosystem.

Generally, web advertising closely follows the same two major models of traditional advertising.

First, there is direct advertising, which simply means that the goal of the ad is to get a direct response from the viewer. A good example is sponsored search where ads are shown beside a search result. The most difficult thing with this type of advertising is making sure the ads are relevant. If you searched for the word puzzle – did you mean jigsaw, crossword or Legos? These are complex issues we have spent a lot of time thinking about – and not in the Mad-Men-sit-back-with-whiskey way, but more of a microeconomics, super-computing way.

And then there is brand advertising, which aims to create a favorable impression about a brand or a product. In this construct, ads are usually served up by graphical means, in what we call display ads on web pages. The challenge is matching the placement/context of the ad with behavior of the viewer, both of which also introduce a stunning number of variables and data points.

In both modes – search and display – some complex learning algorithms are needed to provide relevant ads to a user. In a nutshell, it is this problem of relevance that makes advertising one of our Key Scientific Challenges. And it’s also central to the somewhat newer concept of computational advertising — a scientific discipline we developed at Yahoo! Labs that aims to formalize the problem of finding the best ad for a given user in a given context.

It sounds logical enough, right? Can we really build a system that serves the most relevant ad to a user every single time? Can we bring advertising into the realm of the other “computational” sciences? Well, we think so and we’re working hard to tackle that kind of personal relevance. It’s simply going to take some hard core science, some persistence, and continued sharp thinking and hopefully more programs like those at universities (Stanford has a leg up) and our own Key Scientific Challenges to crack it.

Vanja Josifovski
Yahoo! Labs

P.S. If you’re curious about just how big a deal Computational Advertising is, one of Yahoo!’s foremost experts in the field, Andrei Broder, was just elected to the National Academy Engineering. That’s pretty good testimony that advertising is a little bit art AND science.

Quick – which padlock brand can withstand a bullet hole? Which personal computer shattered Orwellian drudgery in 1984? What soft drink did some kid give “Mean Joe” Greene? Which hamburger consists of two all beef patties special sauce lettuce cheese pickles onions on a sesame seed bun? Which paper towel is the quicker picker upper? Where can you have it your way? Which cellular network never has you asking, “Can you hear me now?”

That was easy, right? Well, that’s thanks to ad agency creatives who turned simple brand messages into iconic household catchphrases. They make it look easy, but it’s not. And it can be even tougher when creating online advertising because there’s more to it than simply putting an ad on TV. We know all about that and are working with our advertisers to foster big, memorable ideas online.

Here’s a digital short that our creatives produced to pay homage to all those creatives out there:

For the full story behind this video, head over to our new Yahoo! Advertising blog.

Nicki Dugan
Blog Editor

As Yahoo! Chief Marketing Officer Elisa Steele promised after giving a sneak preview last week, today we unveil our new global marketing campaign. It consists of online, television, radio, print, and outdoor creative that emphasizes how Yahoo! is focused on YOU like never before. Our new video ad, known as “Anthem,” was shot in five countries and features vignettes that illustrate the many ways in which Yahoo! helps you make the Internet your own.

Have a look:

The spot debuted online on Yahoo! (you.yahoo.com) as well as on sites like Yahoo! Video, YouTube, Facebook, and Hulu.com. It will also begin airing on all the major U.S. TV networks and top cable channels, including AMC, ESPN, USA, Comedy Central and Bravo. You’ll see it in the UK and India starting October 5, and in other markets in 2010, including Brazil, Canada, France, Hong Kong, Indonesia, Korea, and Taiwan.

Whaddaya think?

Stay tuned for behind-the-scenes insights into Anthem’s production…

Nicki Dugan
Blog Editor

Next week, we will launch what will be Yahoo!’s single-largest global integrated marketing campaign ever. I gave a sneak preview today as part of Yahoo!’s presence at Advertising Week in New York City. (Think advertising meets Fashion Week.)

The core of our message will focus on YOU. It will celebrate all of your individual wants, needs, interests, and passions. That’s because Yahoo! really is all about you — we’re constantly evolving to give you more of what you want and less of what you don’t. We want you to make the Web your own and are designing products to put you in the driver’s seat of your Internet experience. Our new brand positioning reflects that.

Our campaign will kick off in the U.S. on Monday, September 28, expand to the U.K. and India on October 5, and reach other markets in 2010, including Brazil, Canada, France, Hong Kong, Indonesia, Korea, and Taiwan. We’re quite serious about our vision to be the center of people’s online lives. You’ll find us what might seem like everywhere online, on network and cable TV, on the radio, in print, and outdoor.

Why now? We are relentlessly focused on making the Web more personally relevant for you. We’ve backed that up with major product enhancements during the past few months. We recently updated Mail and Messenger with new tools and features. In the week ahead, our new homepage — the epitome of openness and personalization — will be broadly available in a number of global markets. And, today, we’re debuting the new Yahoo! Search experience. Of course, there’s plenty more to come, and although we’re still one of the most recognizable brands in the world, now’s the time to start retelling our great story and revitalizing our bond with people.

I should also note that people like you helped shape the message of this new campaign. We conducted a massive research effort that involved focus groups with thousands of people in seven countries. It helped us confirm that a brand refresh was in order, that people crave an answer to “What is Yahoo! all about?”, and that, although we’ve drifted apart a bit, people around the world still want to love Yahoo!.

This is much more than an advertising campaign. It’s our promise to you that your life online will become more personal and more meaningful with Yahoo!. We believe we offer the only Web experience that converges your personal world and the world at large to create integrated, personally relevant experiences. And it sets the direction for how we will deliver awesome new experiences and continue to push the frontiers of science and technology to invent Web products and services that will dazzle you for years to come.

You’ll hear lots more about the campaign in the coming weeks. Be sure to check back on Monday when we pull back the curtain. We look forward to hearing what you think. We want you to get more out of the Web, so you can get more out of life.

Elisa Steele
EVP & Chief Marketing Officer

During Fashion Week, fashionistas exalt haute couture with models, runways, paparazzi, and the latest fashion trends. During Advertising Week, the stars of Madison Avenue celebrate creativity with keynotes, awards, parties, and general mingling of brilliant marketing minds.

This week, Manhattan will be abuzz with thousands of brand stewards and creative types, coming together to pay tribute to the best in advertising and share visions about what the future brings. And Yahoo! will be there in force – helping marketers understand how to make the most of the online medium.

In honor of the occasion, CEO Carol Bartz and a bevy of senior Yahoo! executives rang the opening bell at NASDAQ this morning. Here’s video to prove it:

Nicki Dugan
Blog Editor

Do you own your own business and wish you could run banner ads online?

Beginning today, with the launch of Yahoo! My Display Ads, businesses of all sizes can easily launch display advertising campaigns on Yahoo! to reach the targeted audiences that matter to them most. The new solution is an easy and affordable way to create and run display ads on Yahoo! – even without a major ad budget. In fact, a campaign can cost you as little as $30 per day.

So, how does it work?

Let’s say you own a local boutique shop and you want to reach local-area women. With Yahoo! My Display Ads, you can build a customized ad campaign in a matter of minutes. First, choose from our more than 800 ad templates (organized by business category) and customize the text, images, colors and add your company logo —no design expertise necessary. Then, set your budget and decide who you want to target — by Yahoo! channel content, age, demographics, and location. For example, you could target females between the age of 18-24 in your city. (Keep in mind, though, that the more you target, the less potential traffic you may receive. We recommend starting broad and working your way smaller.) You can even decide whether you want to pay by how many times your ad was viewed or by how often it was clicked on. Finally, we give you daily reports on how ads are performing and let you easily adjust your campaign on the fly.

We partnered with Seattle-based AdReady to develop this service, marking the first time that businesses with ad budgets of all sizes can reach localized portions of Yahoo!’s 165 million users in the U.S. with targeted display ads. To learn more, check out mydisplayads.yahoo.com and get started!

Amanda Reierson
Director, B2B Marketing

You love to travel. You recently researched hotels in Thailand online. You see an ad that features the latest fare discounts from your airport to Bangkok. You’re not sure how that happened, but it’s pretty great serendipity. Now you’re booked in 37A and looking forward to tasting a proper panang curry.

That’s one scenario that demonstrates how valuable online advertising can be when it’s customized to your personal interests. It’s the kind of relevant advertising that saves you time and money – travel discounts, coupons, retailer sales, etc.

But we know that kind of customized advertising isn’t everyone’s cup of tea (or bowl of curry).

That’s why we’re introducing a new privacy choice, giving you greater choice in how you manage your privacy online by letting you opt-out of customized advertising on Yahoo.com

We announced that new capability today in a letter to Congressman John Dingell (D – Mich.), the Chairman of the House Energy and Commerce Committee that recently sent an inquiry to 33 companies about ad customization. You can read the full letter here. This new choice has been in the works for some time now, but we chose to move up our announcement so that we could share this information with Congress today.

It won’t take effect until the end of the month but you can opt out today by clicking on the “Privacy Policy” link at the bottom of virtually every page on the Yahoo.com network and look for the “Opt-Out” link in the sidebar.

Since most of Yahoo! is free, we know there’s not much preventing you from up and leaving us at any time. That’s why we work hard to earn your trust. And we think that comes with offering transparency and choice about the options available to you.

Anne Toth
Head of Privacy & VP – Policy